Our provincial organization has a bylaw that requires a vote of our OTPP members if we agree to a negotiated settlement around our pension valuation. Quite simply, the valuation formula is based on best guesses about the future economy and the long-term viability of the plan to pay out members as far ahead as 70 years from now.
Any decimal fluctuation in the Real Return Bond Rate greatly affects this projection and the projection is only made once every three years, at which point the future of the plan is either balanced, in surplus, or in deficit. When in deficit, as at January 1, 2008, choices must be made as to how to balance the plan.
The least attractive options to balance the pension include loss of future benefits and increased premiums. The most attractive option is to negotiate what's called a "discount rate" on the valuation formula which can turn a deficit to a balance or even a surplus.
Any such negotiaton includes several bodies including the provincial government and the Ontario Teachers' Federation (OSSTF, ETFO, OECTA, and AEFO). Only OSSTF has a safeguard vote to ensure members have a democratic voice in a negotiated settlement to balance the plan. That said, while we can direct OSSTF representatives how to vote, we do not hold a majority in the discussions.
While we hope it unnecessary, this background is all to help inform you of a potential OSSTF vote regarding a negotiated settlement to balance the plan. As with the horrible timing of a couple of years ago, we are only learning of the possible details of this vote near the end of the school year. The OTF meets during the summer, and wishes to resolve the situation at their meeting. Quite simply, you will largely be informed DIRECTLY FROM OSSTF PROVINCIAL OFFICE.
As per a memo received locally at 4pm on the second last day of our school year: "If you have any questions or concerns with respect to the voting procedure, please contact either Ruth Kirkham or Norm Uhrig at Provincial Office" (1-800-267-7867).
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